Both Allergan, Inc. (NYSE:AGN) and Actavis plc (NYSE:ACT) have come together to form one of the biggest pharmaceutical companies of the world with projected pro forma revenue of $23 billion in 2015. Under the current offer, Allergan would receive $66 billion in cash and shares of Actavis.
The combined company would be able to market and sell products in more than 100 countries with revenue growth target of 10%. The merger would help the companies generate synergies of $1.8 billion while investing up to $1.7 billion in research and development. Both the companies are expecting free cash flow generation of $8.0 billion and more in 2016. According to the current terms, Actavis PLC would acquire Allergan for $129.22 in cash along with 0.3683 shares of Actavis against every single share of Allergan.
Brent Saunders, CEO of Actavis plc (NYSE:ACT), said,
“This acquisition creates the fastest growing and most dynamic growth pharmaceutical company in global healthcare, making us one of the world’s top 10 pharmaceutical companies.”
While talking about the reach of the new company Saunders added, “The combined company will have a strong balance sheet, growing product portfolios and broad commercial reach extending across 100 international markets.”
Saunders discussed the financials of the merger with Allergan, Inc. (NYSE:AGN) saying,
“This is a financially compelling transaction. With pro forma revenues in excess of $23 billion anticipated in 2015, this combination doubles the revenue generated by our brands business and doubles the international revenue of the combined company.”
While talking about the merger, David E. I. Pyott, CEO of Allergan, Inc. (NYSE:AGN), said,
“Today’s transaction provides Allergan stockholders with substantial and immediate value, as well as the opportunity to participate in the significant upside potential of the combined company.”
Mr. Pyott discussed about the expansion opportunities saying,
“In the U.S., the combination makes us more relevant to an even broader group of physicians and customers. Overseas, it will enhance our commercial position, expand our portfolio and broaden our footprint in Canada, Europe and Southeast Asia and other high-value growth markets, including China, India, the Middle East and Latin America.”
The shares of Actavis plc (NYSE:ACT) touched 52-week high of $255.51 after the announcement.
This article has been written by Prakash Pandey.